Partnering Key To New Sun SMB Strategy

Channel initiative to embrace Intel, Linux

Sun Microsystems plans to dig deeper into the SMB space in a move that could either open the company to working with smaller solution providers or increase opportunities for its larger partners,or a combination of both.

That market, which Sun calls the small and midsize enterprise (SME) space, is huge but has been largely ignored by Sun in the past, said Gary Grimes, the company's vice president of partner management and sales operations.

That has to change, and Sun will do it with channel partners, Grimes said.

"I think you can anticipate that we'll be doing a lot of work . . . over the next few months to try and put together a proposition for partners that makes sense there," he said.

A big part of Sun's SME push will come from new Intel-based servers running the Linux operating system the company plans to release in the near future, Grimes said. "That's a market that's best served by working through partners," he said.

Whether that means Sun will look to recruit solution partners for the SME space remains to be seen, Grimes said. The SME solution provider doesn't fit the profile of Sun's traditional partners, which typically focus on consulting and building infrastructures. "If they're not ready, willing or able to pick it up, then obviously we're going to have to think about expansion in some fashion," he said.

SUN'S SMB STRATEGY

>> Sun looking to work with small VARs or drive more business to larger ones--or a combination of both.>> Push revolves around Intel-based servers and Linux.>> Some see move as continuation of battle with Microsoft.

Masood Jabbar, executive vice president of global sales operations at Sun, said he sees opportunity in opening up to smaller solution providers.

"It'll probably be a mix of some of our current solution providers [and verticals that are actually fairly large in terms of their coverage model," Jabbar said. "They have the knowledge, the depth and breadth, as well as the reach towards the small and midsize enterprises. So it'll be a combination of vertical specialists plus the smaller solution providers playing [in niches."

Sun's moves into the Linux space will be interesting, said Ed Gogol, director of enterprise systems at Solarcom, a Norcross, Ga.-based solution provider.

"We see Linux mainly for Web servers. Lots of them. It might make sense to replace them with Sun," Gogol said.

Sun has to move into the SME space, and its current solution providers can sell the vendor's products there. Still, most won't because the margins aren't there, said Jamie Holzkamp, director of Sun systems and services at Forsythe Solutions Group, Skokie, Ill.

Even so, Holzkamp praised Sun's SME efforts,even the vendor's signing of direct marketers such as Insight Enterprises and CDW Computer Centers,as a way to battle Microsoft.

"Sun's problem is incursions in the low end of the Sun space by Microsoft," Holzkamp said. "They can't hit those low prices. The move to CDW and Insight was something they needed to do," he said. "Sun is a scrappy fighter. But it's seeing its hold on the Unix space being eaten away. So CDW doesn't hurt us. It may help, because it might help Unix get a foothold in such customers. If those customers want to migrate upstream, they can move to the traditional channel, at least in theory."

Small businesses tend to consume as much time as enterprise customers, said Jim Quasius, executive vice president at Gateway Computer Associates, a St. Petersburg, Fla.-based Sun solution provider. "We once did a $20,000 security solution and spent more time than normal, just to make $5,000," he said. "But the customer is happy, and referenceable. It could lead to future business."

Sun executives in February said the vendor would enter the "Lintel" space with a series of Intel-based servers running Linux. Although the company has yet to unveil the products, plans for the their manufacturing and launch are already in place.

The SME space in the United States is "probably the single-largest GDP on the planet, if you want to measure it in GDP terms," Jabbar said. "And it's obviously attractive to us. It is being dominated by either time sharing or very small VARs who are very application-specific."